HANGZHOU, China, April 3, 2024 /PRNewswire/ -- Jiuzi Holdings Inc. (Nasdaq: JZXN; the "Company" or "JZXN"), an emerging new energy vehicle (NEV) dealership group operating under the brand name "Jiuzi" in China, announced today that Shenzhen Jiuzi New Energy Holding Group Co., Ltd. ("Shenzhen Jiuzi"), a wholly owned subsidiary of the Company, entered into a non-binding letter of intent ("LOI") for the acquisition of Shenzhen Maigesong Electric Technology Co., Ltd. ("Shenzhen Maigesong").
Pursuant to the terms of the LOI, Shenzhen Jiuzi will acquire 100% of the equity of Shenzhen Maigesong in exchange for certain restricted share compensation of the Company and upon the completion of the acquisition, the Company shall invest RMB 30 million to fund the construction of Shenzhen Maigesong's rechargeable lithium battery production line. This investment will be divided into two stages, with RMB 15 million to be invested by the end of April 2024 and another RMB 15 million by the end of November 2024. The construction of this production line will be led by the original shareholders of Shenzhen Maigesong, Mr. Li Song and Mr. Fan Xuejun (the "Maigesong Shareholders"). Upon the completion of the battery production line, it will immediately commence production and sales of rechargeable lithium battery products.
The LOI includes an earnout provision which provides that Shenzhen Maigesong shall achieve a revenue target of RMB 119.81 million by the end of December 2025, and a revenue target of RMB 504.22 million by the end of December 2026. The parties agreed in the LOI that if the actual revenue generated between 2024 and 2025 falls below 80% of the revenue target, the Maigesong Shareholders will provide corresponding compensation measures with their held shares and lose control of Shenzhen Maigesong.
The inclusion of the earnout provision holds significant importance for both the Company and Shenzhen Maigesong. It clearly defines the rights and responsibilities of both parties and represents not only a risk and challenge but also opportunity and motivation. Both parties will work together to achieve the revenue targets and promote the sustained development and growth of the enterprise.
About Jiuzi Holdings, Inc.
Jiuzi Holdings, Inc., headquartered in Hangzhou, China, and established in 2017, franchises and operates retail stores under the brand name "Jiuzi" to sell New Energy Vehicles ("NEVs") in third and fourth-tier cities in China. The Company mainly sells battery-operated electric vehicles and sources NEVs through more than twenty NEV manufacturers. It has 51 operating franchise stores and one company-owned store. For more information, visit the Company's website at http://www.zjjzxny.cn/.
About Shenzhen Maigesong Electric Technology Co., Ltd.
Maigesong Electric specializes in the design and development of embedded battery control systems, providing customers with products or key components through ODM or SKD models, as well as intellectual property licensing. It also provides comprehensive technical support and ancillary services. The company holds nearly a hundred patents and has obtained over ten system certifications, including UL (UL2054-2011) (U.S. safety standard for household and commercial batteries) and CB (IEC62133-2:2017) (EU safety certification for lithium-ion batteries used in portable electronic products).For more information, visit the Company's website at http://www.mgxon.com/.
Forward-Looking Statements
All statements other than statements of historical fact in this announcement are forward-looking statements. These forward-looking statements involve known and unknown risks and uncertainties. They are based on current expectations and projections about future events and financial trends that the Company believes may affect its financial condition, results of operations, business strategy, and financial needs, including the expectation that the Offering will be completed. Investors can identify these forward-looking statements by words or phrases such as "may," "will," "expect," "anticipate," "aim," "estimate," "intend," "plan," "believe," "potential," "continue," "is/are likely to" or other similar expressions. Specifically, forward-looking statements may include statements related to the following matters of the Company:
These forward-looking statements are based on information available as of the date of this press release and our management's current expectations, forecasts and assumptions, and involve a number of judgments, risks and uncertainties that may cause actual results or performance to be materially different from those expressed or implied by these forward-looking statements, including the occurrence of any event, change or other circumstances that could give rise to the terms of the LOI not hereafter being memorialized in a definitive agreement; the outcome of any legal proceedings that have been, or will be, instituted against the Company or other parties to the LOI following announcement of the LOI and transactions contemplated therein; the ability of the Company to meet NASDAQ listing standards in connection with the consummation of the transaction contemplated therein; the inability to complete the transactions contemplated by the LOI due to the failure to meet certain closing conditions; risks that the proposed transaction disrupts current plans and operations and the potential difficulties in employee retention as a result of the announcement of the LOI and consummation of the transaction described therein; costs related to the proposed acquisition; changes in applicable laws or regulations; the ability of the combined company to meet its financial and strategic goals, due to, among other things, competition, the ability of the combined company to grow and manage growth profitability, maintain relationships with customers and retain its key employees; the possibility that the combined company may be adversely affected by other economic, business, and/or competitive factors; and other risks and uncertainties described herein, as well as those risks and uncertainties discussed from time to time in other reports and other public filings with the Securities and Exchange Commission by the Company. The Company undertakes no obligation to update forward-looking statements to reflect subsequent events, circumstances, or changes in its expectations, except as may be required by law. Although the Company believes that the expectations expressed in these forward-looking statements are reasonable, it cannot assure you that such expectations will turn out to be correct. Accordingly, forward-looking statements should not be relied upon as representing our views as of any subsequent date, and you should not place undue reliance on these forward-looking statements in deciding whether to invest in our securities. We do not undertake any obligation to update forward-looking statements to reflect events or circumstances after the date they were made, whether as a result of new information, future events or otherwise, except as may be required under applicable securities laws.
